Financial Management Practices and Financial Performance of Insurance Companies Listed at Nairobi Securities Exchange, Kenya
| dc.contributor.author | Kihara, Christine | |
| dc.date.accessioned | 2026-02-10T12:40:03Z | |
| dc.date.available | 2026-02-10T12:40:03Z | |
| dc.date.issued | 2025-08 | |
| dc.description | A Research Project Submitted To the School Of Business, Economics and Tourism in Partial Fulfillment of the Requirements for the Award of Master of Business Administration Degree (Finance) Of Kenyatta University. August, 2025 Supervisor James Macharia | |
| dc.description.abstract | Kenya's financial services sector includes the insurance sector, which is crucial because it aids in the expansion and improvement of the national economy. Over the years, the insurance industry contribution to gross domestic product has been improving. However, in Kenya, insurance industry has performed poorly financially, with overall growth rates flat or dropping. This analysis was driven by apparent shifts in the insurance industry's rate of return on equity. This study looked into the relationship between Kenyan insurance businesses that are listed on public markets' financial performance and their financial management practices. The specific objectives included examining the impact of working capital management, capital budgeting, and capital structure on the financial performance of listed insurance companies as well as the extent to which inflation affected the relationship between financial management practices and listed insurance companies' financial performance. The theory of agency, market timing, and stakeholders served as the foundation for this investigation. An explanatory research design was used. Six mentioned insurance companies made up the target population. In this analysis, all six listed insurance firms were considered. Because there were so few companies, a census was undertaken. Panel secondary data for the years 2015–2022 was used. Both descriptive and inferential statistics were used to analyze the data. The correlation analysis's findings showed that the working capital ratio and return on equity have a positive relationship. Furthermore, using random effects regression analysis, a high and positive association was shown between successful financial management and working capital management. However, return on equity and the debt-to-equity ratio were found to be adversely connected in the correlation study's results. Furthermore, a high and negative correlation between capital structure and financial performance is revealed by random effects regression analysis. The results of the correlation study indicated that return on investment and return on equity were positively correlated. Furthermore, using random effects regression analysis, it was discovered that capital budgeting and financial success had a positive and significant correlation. The study also discovered that the association between financial performance and financial management techniques is negatively moderated by inflation. According to the study's findings, capital structure has a detrimental effect on financial performance whereas working capital management and capital budgeting have a positive one. This study suggested that insurance companies listed at NSE should seek to maintain adequate current assets that would be enough to cater for all short term liabilities that may arise in the course of the business operations. Insurance firms should also seek to balance the use of debt financing and equity financing in order to ensure the negative effect of high debts is neutralized. This study hence recommended that insurance firms should seek to adopt practices that will reduce the cost of investment but also increase the return on the investment. This study also made suggestions that insurance firms listed at NSE should be able to understand the economic situations in terms of the inflation and make the right financial decisions that would not negatively impact their performance. The study also recommends that IAA should provide regulations that will protect the insurance firms against the effect of inflation. | |
| dc.identifier.uri | https://ir-library.ku.ac.ke/handle/123456789/32350 | |
| dc.language.iso | en | |
| dc.publisher | Kenyatta University | |
| dc.title | Financial Management Practices and Financial Performance of Insurance Companies Listed at Nairobi Securities Exchange, Kenya | |
| dc.type | Thesis |